Indian equity
benchmarks, after a reasonable weakness of the last few sessions, witnessed a
sharp comeback on Monday and closed the day with hefty gains of over one and
half percent, on the back of strong gains in heavyweights such as Indusind
Bank, SBI, ICICI Bank and HDFC Bank. Market started the day on positive note
and traded in fine fettle, as sentiments got a boost with the government data
showing that India's exports in April jumped nearly three-fold to $30.63
billion from $10.36 billion in the same month last year. Imports too rose to
$45.72 billion last month as against $17.12 billion in April 2020. Traders also
took note of report that the average of daily cases has fallen for seven days
in a row with India reporting 281,860 new cases in the last 24 hours. This is
the first time since April 21 that India has recorded new cases below the
300,000 mark. The indices extended gains and continued their upward rally in
late afternoon session, taking support from the India Meteorological Department
(IMD) stating that the southwest monsoon is likely to arrive over Kerala on May
31, a day earlier than its normal onset date. The normal onset date of the
monsoon over Kerala is June 1. Traders also found some solace with RBI data
showed that country's foreign exchange reserves increased by $1.444 billion to
$589.465 billion in the week ended May 7, 2021. In the previous week ended
April 30, 2021, the reserves had risen by $3.913 billion to $588.02 billion.
Market participants paid no heed towards report that the wholesale price-based
inflation shot up to an all-time high of 10.49 per cent in April, on rising
prices of crude oil and manufactured items. Also, a low base of April last year
contributed to the spike in inflation in April 2021. The street also overlooked
that Care ratings' latest survey stated that amid a raging second wave of
COVID-19 and subsequent restrictions on business activities imposed by several
states, economic recovery is beginning to lose steam and the country's GDP
growth is likely to be below nine per cent for the current fiscal. Finally, the
BSE Sensex gained 848.18 points or 1.74% to 49,580.73, while the CNX Nifty was
up by 245.35 points or 1.67% to 14,923.15.
The US markets
ended lower on Monday on lingering concerns about inflation and the outlook for
monetary policy weighed on Wall Street ahead of the release of the minutes of
the Federal Reserve's latest monetary policy meeting on Wednesday. Traders are
likely to closely analyze the Fed minutes for indications officials are growing
concerned about the recent acceleration in inflation and considering tapering
asset purchases. The Fed has repeatedly signaled that it believes the increase
in inflation largely reflects transitory factors, although the spike in
consumer prices reported by the Labor Department last week still helped trigger
a sell-off on Wall Street. On the economic data front, the Federal Reserve Bank
of New York released a report showing its index of regional manufacturing
activity pulled back modestly in May after jumping to a more than three-year
high in the previous month. The New York Fed said its general business
conditions index dipped to 24.3 in May from 26.3 in April, although a positive
reading still indicates growth in regional manufacturing activity. Street had
expected the index to slip to 23.9 after reaching its highest level since
October of 2017 in the previous month. Meanwhile, the National Association of
Home Builders released a separate report showing homebuilder confidence in the
US held stable in the month of May. The report showed the NAHB/Wells Fargo
Housing Market Index came in at 83 in May, unchanged from April. The unchanged
reading matched street estimates.
Crude oil futures ended higher on
Monday on hopes energy demand will pick up soon as the US and European
economies are showing signs of a quick recovery from the pandemic. A private
report said that the UK will be relaxing some social restrictions supported oil
prices. France and Spain have reportedly relaxed COVID-related restrictions.
Travel restrictions have been relaxed in Netherlands and Portugal as well.
Further, with climbing vaccinations and dwindling virus cases in the US,
investors expect increased demand for gasoline in the world's largest economy
in the coming weeks. Meanwhile, traders were also tracking reports from the
Middle East, where Israel and Gaza's ruling Hamas militant group faced mounting
international calls for a ceasefire in hostilities that entered their second
week with no end in sight. Crude oil futures for June rose $0.90 or about 1.4
percent to settle at $66.27 barrel on the New York Mercantile Exchange. July
Brent crude gained $0.79 or 1.15 percent to settle at $69.50 a barrel on
London's Intercontinental Exchange.
Indian rupee ended higher against
dollar on Monday, owing to dollar sale by exporters and banks and positive
domestic equities. This was the second consecutive session when the rupee was
traded higher against dollar. Sentiments were upbeat with the government data
showing that India's exports in April jumped nearly three-fold to $30.63
billion from $10.36 billion in the same month last year. Imports too rose to
$45.72 billion last month as against $17.12 billion in April 2020. Traders also
remain energized after RBI data showed that country's foreign exchange reserves
increased by $1.444 billion to $589.465 billion in the week ended May 7, 2021.
Traders ignored report that foreign portfolio investors (FPIs) pulled out Rs
6,452 crore so far in May from Indian markets amid tumbling investor sentiment
due to the second wave of the COVID-19 pandemic. On the global front; dollar
edged higher on Monday as new COVID-19 restrictions in Asia and mixed economic
data in China encouraged investors to stick with safer currencies. Finally, the
rupee ended 73.22, stronger by 7 paise from its previous close of 73.29 on
Friday.
The FIIs as per Monday's data
were net seller in equity segment, while net buyer in debt segment. In equity
segment, the gross buying was of Rs 5812.52 crore against gross selling of Rs
8294.68 crore, while in the debt segment, the gross purchase was of Rs 675.24 crore
with gross sales of Rs 553.36 crore. Besides, in the hybrid segment, the gross
buying was of Rs 13.24 crore against gross selling of Rs 33.70 crore.
The US markets ended lower on
Monday weighed down by tech shares as signs of growing inflation worried
investors about the potential for tighter monetary policy. Asian markets are
trading in green on Tuesday as investors weighed the pace of growth as nations
vaccinate and economies reopen against a pick-up in virus cases in the region.
Indian markets surged over 1.5 percent on Monday boosted by banking and
financial stocks, as they rebounded from a sharp drop in the previous session.
Today, the markets are likely to extend their previous session's gaining
momentum with gap-up opening tracking rally in Asian peers. Traders will be
taking some encouragement as India recorded daily cases below 3 lakh for the
second straight day. The fresh case count in the last 24 hours stood at 2.63
lakh versus 2.81 lakh. Some support will come with the RBI data showing that
India Inc's foreign investment in the first month of this current fiscal jumped
by more than two-times year-on-year to $2.51 billion. However, there may be
some cautiousness as Moody's Investors Service said if the second wave of the
pandemic does not decline to more manageable levels and results in a prolonged
and wider lockdown, it will have a more severe effect on companies' earnings
recovery. Traders may take note of report that the Reserve Bank of India (RBI)
said in its monthly bulletin that the biggest blow emerging from the second
wave of the coronavirus pandemic is demand shock while the supply side remains
better positioned. Loss of mobility, discretionary spending and employment are
among the key concerns emerging. However, the RBI bulletin acknowledged that
the loss of growth momentum is not as severe as at this time a year ago when
the country had witnessed a Covid-induced lockdown. Meanwhile, Markets
regulator SEBI has proposed an elaborate framework for setting up a gold
exchange wherein the yellow metal will be traded in the form of electronic gold
receipts and will help in having a transparent domestic spot price discovery
mechanism. Jewellery industry stocks will be in focus as Gem and Jewellery
Export Promotion Council (GJEPC) said the demand for gem and jewellery is back
in major export markets, as the overall shipments of gems and jewellery surged
to Rs 25,226.11 crore year-on-year in April 2021. There will be some reaction
in real estate industry stocks with a private report stating that housing sales
increased by 21 per cent while new supply declined 40 per cent year-on-year
during January-March 2021 across seven major cities. Power industry stocks will
be in limelight as government data showed India's electricity use fell 6.2 per
cent during the first half of May compared with the second half of April, as
coronavirus lockdowns imposed by states across the country stifled power
demand.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
14,923.15
|
14,786.34
|
14,998.99
|
BSE
Sensex
|
49,580.73
|
49,126.44
|
49,831.73
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State
Bank of India
|
1,065.55
|
383.10
|
369.44
|
390.99
|
Tata
Motors
|
511.62
|
321.10
|
313.71
|
326.16
|
ITC
|
380.01
|
212.60
|
210.50
|
215.85
|
Tata
Steel
|
287.53
|
1150.85
|
1,116.84
|
1,171.54
|
UPL
|
280.18
|
770.75
|
753.54
|
786.49
|
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